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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 18 — Exemptions: Non-UK resident taxpayers

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 651   Overseas Pensions Act 1973

     (1)    No liability to income tax arises on a pension which is paid under section 1 of

OPA 1973 if the foreign residence condition is met.

     (2)    Subsection (1) applies whether or not the pension is paid out of a fund

established under a scheme made under section 1 of OPA 1973.

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     (3)    But subsection (1) does not apply to any part of a pension paid because the

Pensions (Increase) Acts apply to it.

     (4)    In this section “the Pensions (Increase) Acts” means—

           (a)           the Pensions (Increase) Act 1971 (c. 56), and

           (b)           any Act passed after that Act for purposes which correspond to the

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purposes of that Act.

 652   Overseas Service Act 1958

     (1)    No liability to income tax arises on a pension—

           (a)           which is paid under the authority of the Overseas Service Act 1958 (c.

14), and

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           (b)           which the Secretary of State certifies to be attributable to the

employment of a person in the public services of an overseas territory,

            if the foreign residence condition is met.

     (2)    If the Secretary of State certifies that only part of a pension paid under the

authority of the 1958 Act is attributable to the employment of a person in the

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public services of an overseas territory, subsection (1) applies only to that part

of the pension.

     (3)    For the purposes of subsections (1) and (2), a pension is paid under the

authority of the 1958 Act if condition A or B is met.

     (4)    Condition A is that the pension is paid under either of the following—

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           (a)           an order made under section 2 of the 1958 Act, or

           (b)           section 4(2) of the 1958 Act,

            as it has effect (by reason of section 2(3) of OPA 1973) as a scheme under section

2 of OPA 1973.

     (5)    Condition B is that the pension is paid under a scheme which the Secretary of

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State—

           (a)           has made under section 2(1) of OPA 1973, and

           (b)           has certified to correspond to—

                  (i)                 an order made under section 2 of the 1958 Act, or

                  (ii)                section 4(2) of the 1958 Act.

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     (6)           For the purposes of this section, a person is taken to be employed in the public

service of an overseas territory at any time when—

           (a)           the person is employed in any capacity under the government of that

territory, or under any municipal or other local authority in it,

           (b)           the person is employed in circumstances not falling within paragraph

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(a), by a body corporate established for any public purpose in that

territory by an enactment of a legislature empowered to make laws for

that territory, or

 

 

Income Tax (Earnings and Pensions) Bill
Part 9 — Pension income
Chapter 18 — Exemptions: Non-UK resident taxpayers

    306

 

           (c)           the person is the holder of a public office in that territory in

circumstances not falling within paragraph (a) or (b).

     (7)           In subsection (6) references to the government of an overseas territory include

references to—

           (a)           a government constituted for two or more overseas territories, and

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           (b)           any authority established for the purpose of providing or

administering services which are common to, or relate to matters of

common interest to, two or more such territories.

     (8)    In this section—

                    “the 1958 Act” means the Overseas Service Act 1958 (c. 14);

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                    “certified” means certified for the purposes of ICTA 1970, ICTA or this

Act.

 653   Overseas Service Pensions Fund

     (1)    No liability to income tax arises on a pension which is paid out of the Overseas

Service Pensions Fund if the foreign residence condition is met.

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     (2)    In this section “the Overseas Service Pensions Fund” means the fund with that

name established under section 7(1) of the Overseas Aid Act 1966 (c. 21).

     (3)    In this section “pension” includes not only the things mentioned in section

647(4) but also any sum payable in respect of ill-health.

 654   The Pensions (India, Pakistan and Burma) Act 1955

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     (1)    No liability to income tax arises on a pension paid under the authority of the

Pensions (India, Pakistan and Burma) Act 1955 (c. 22) if the foreign residence

condition is met.

     (2)    A pension is paid under the authority of the 1955 Act if—

           (a)           the pension is paid under the 1955 Act as it has effect (by reason of

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section 2(3) of OPA 1973) as a scheme under section 2 of OPA 1973, or

           (b)           the pension is paid under a scheme which the Secretary of State—

                  (i)                 has made under section 2(1) of OPA 1973, and

                  (ii)                has certified to correspond to the provision made under the

1955 Act.

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     (3)    This section does not apply to any part of a pension paid because the Pensions

(Increase) Acts apply to it.

     (4)    In this section—

                    “the 1955 Act” means the Pensions (India, Pakistan and Burma) Act 1955

(c. 22);

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                    “certified” means certified for the purposes of ICTA 1970, ICTA or this

Act;

                    “the Pensions (Increase) Acts” means—

                  (a)                 the Pensions (Increase) Act 1971 (c. 56), and

                  (b)                 any Act passed after that Act for purposes which correspond to

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the purposes of that Act.

 

 

Income Tax (Earnings and Pensions) Bill
Part 10 — Social security income
Chapter 2 — Tax on social security income

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Part 10

Social security income

Chapter 1

Introduction

 655   Structure of this Part

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     (1)    The structure of Part 10 is as follows—

                    Chapter 2—

                  (a)                 imposes the charge to tax on social security income, and

                  (b)                 provides for deductions to be made from the amount of income

chargeable;

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                    Chapter 3 sets out the UK social security benefits which are charged to tax

under this Part and identifies—

                  (a)                 the amount of income chargeable to tax for a tax year, and

                  (b)                 the person liable to pay any tax charged;

                    Chapters 4 and 5 deal with exemptions from the charge to tax on UK social

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security benefits (whether under this Part or any other provision);

                    Chapters 6 and 7 make provision about foreign benefits.

     (2)    For other provisions about the taxation of social security benefits see—

                    section 151 of FA 1996 (power for the Treasury to make orders about the

taxation of benefits payable under Government pilot schemes);

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                    section 84 of FA 2000 (exemption of payments under New Deal 50plus);

                    section 85 of FA 2000 (exemption of payments under Employment Zones

programme).

     (3)    For the charge to tax on social security pensions, see Part 9 (pension income).

Chapter 2

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Tax on social security income

 656   Nature of charge to tax on social security income

     (1)    The charge to tax on social security income is a charge to tax on that income

excluding any exempt income.

     (2)    “Exempt income” is social security income on which no liability to income tax

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arises as a result of any provision of Chapter 4, 5 or 7 of this Part.

            This definition applies for the purposes of this Part.

 657   Meaning of “social security income”, “taxable benefits” etc.

     (1)    This section defines—

                    “social security income” for the purposes of the Tax Acts, and

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                    “taxable benefits”, “Table A” and “Table B” for the purposes of this Part.

     (2)    “Social security income” means—

           (a)           the United Kingdom social security benefits listed in Table A,

 

 

Income Tax (Earnings and Pensions) Bill
Part 10 — Social security income
Chapter 2 — Tax on social security income

    308

 

           (b)           the United Kingdom social security benefits listed in Table B,

           (c)           the foreign benefits to which section 678 applies, and

           (d)           the foreign benefits to which section 681(2) applies.

     (3)    “Taxable benefits” means—

           (a)           the United Kingdom social security benefits listed in Table A, and

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           (b)           the foreign benefits to which section 678 applies.

     (4)    Subsections (2) and (3) are subject to section 660(2).

     (5)    “Table A” means Table A in section 660.

     (6)    “Table B” means Table B in section 677.

 658   Amount charged to tax

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     (1)    The amount of social security income which is charged to tax under this Part

for a particular tax year is as follows.

     (2)    In relation to a taxable benefit, the amount charged to tax is the net taxable

social security income for the tax year.

     (3)    The net taxable social security income for a taxable benefit for a tax year is

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given by the formula—equation: plus[times[char[T],char[S],char[S],char[I]],minus[times[char[P],char[G],char[D]]]]

            where—

                    TSSI means the amount of taxable social security income for that benefit

for that year (see subsections (4) to (7)), and

                    PGD means the amount of the deduction (if any) allowed from the benefit

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under Part 12 (payroll giving).

     (4)    In relation to bereavement allowance, carer’s allowance, incapacity benefit and

income support (which are listed in Table A), the amount of taxable social

security income is determined in accordance with section 661.

     (5)    In relation to any other benefit listed in Table A, the amount of taxable social

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security income is the amount of the benefit that falls to be charged to tax.

     (6)    In relation to foreign benefits to which section 678 applies, the amount of

taxable social security income is determined in accordance with section 679.

     (7)    In determining for the purposes of this Act the amount of taxable social

security income, any exempt income is to be excluded.

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 659   Person liable for tax

The person liable for any tax charged under this Part is identified in—

           (a)           section 662 (UK benefits), or

           (b)           section 680 (foreign benefits).

 

 

Income Tax (Earnings and Pensions) Bill
Part 10 — Social security income
Chapter 3 — Taxable UK social security benefits

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Chapter 3

Taxable UK social security benefits

 660   Taxable benefits: UK benefits — Table A

     (1)    This is Table A—

            

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TABLE A

TAXABLE UK BENEFITS

 

Social security benefit

Payable under

 
 

Bereavement allowance

SSCBA 1992

Section 39B

 
  

SSCB(NI)A 1992

Section 39B

 

10

 

Carer’s allowance

SSCBA 1992

Section 70

 
  

SSCB(NI)A 1992

Section 70

 
 

Incapacity benefit

SSCBA 1992

Section 30A(1) or (5), 40 or 41

 
  

SSCB(NI)A 1992

Section 30A(1) or (5), 40 or 41

 
 

Income support

SSCBA 1992

Section 124

 

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SSCB(NI)A 1992

Section 123

 
 

Jobseeker’s allowance

JSA 1995

Section 1

 
  

JS(NI)O 1995

Article 3

 
 

Statutory adoption pay

SSCBA 1992 Section 171ZL

 
  

Any provision made for Northern Ireland which

 

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corresponds to section 171ZL of SSCBA 1992

 
 

Statutory maternity pay

SSCBA 1992

Section 164

 
  

SSCB(NI)A 1992

Section 160

 
 

Statutory paternity pay

SSCBA 1992 Section 171ZA or 171ZB

 
  

Any provision made for Northern Ireland which

 

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corresponds to section 171ZA or section 171ZB of

 
  

SSCBA 1992

 
 

Statutory sick pay

SSCBA 1992

Section 151

 
  

SSCB(NI)A 1992

Section 147

 

            

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     (2)    A benefit listed below is not “social security income” or a “taxable benefit” if it

is charged to tax under another Part of this Act—

                    statutory adoption pay;

                    statutory maternity pay;

                    statutory paternity pay;

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                    statutory sick pay.

 

 

 
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Revised 17 February 2003